Pictured is a liquid natural gas tanker, the kind of vessel that brings this fossil fuel to the region. (Courtesy of Henry Herndon)
Liberty Utilities’ electric rates could remain near all-time highs for small and residential customers, according to a company proposal Friday. The current 22.2 cents per kilowatt hour price would dip to 22 cents for a six-month period starting in February if the Public Utilities Commission approves it.
But the process has not been business as usual – and Liberty wasn’t able to get all the power it needs for its large and commercial customers through bids. There were no acceptable final bids to cover large customers’ energy demands from February to April, according to Liberty’s filing.
That means Liberty will have to find another way to purchase the power, likely through a second bidding process in January.
“This is the first time Liberty had no acceptable bids in an energy service (request for proposal),” said John Warshaw, who manages Liberty’s electric supply, in written testimony to the PUC.
The company blamed market volatility, uncertainty over the cost of the region’s largest electric generator, and the state’s 18 community aggregation programs for the hiccup, in its filing with the PUC.
The Northeast relies on fossil fuels to run its electric grid. That includes liquid natural gas, the fuel used to run the region’s largest electric generator, Mystic Generating Station in Everett, Mass. But the region is competing for those fuels with countries in Europe, and the cost has skyrocketed in part due to the conflict in Ukraine. A tanker full of LNG headed for New England can abandon its contract for a higher bidder in Europe, resulting in high costs and hard to predict energy markets.
If energy suppliers make the wrong prediction and charge too little for energy, they risk bankruptcy, which could be making it difficult for utilities like Liberty to secure contracts for power.
“Several bidders elected to not participate in this (request for proposals) due to the current volatility in the energy markets, uncertainty regarding the Mystic cost of service (“COS”) costs, and the unknown effects of the New Hampshire Community Aggregation programs,” said Warshaw.
Community aggregation programs are a new addition to the energy landscape in New Hampshire, expected to launch in the spring. Through this arrangement, municipalities can purchase power on behalf of residents, which proponents believe will lead to cheaper and greener energy and could transform electric markets. If energy rates from the utilities remain high, that could make cheaper alternatives more attractive.
Liberty wasn’t the only utility that had trouble purchasing enough power for all customers. Eversource encountered the same issue when it tried to purchase power for its large customers earlier this month. It only received bids for half of what it needs to cover. The PUC agreed to allow the company to go out to bid a second time to try to secure the remaining load. On Friday, Liberty asked to do the same.
The PUC approved Eversource’s new rates of 20.22 cents for small and residential customers last week. That would be a 7 percent decrease to a typical customer’s monthly bill, or around $15. Last year at this time, the rate was 9.55 cents for the same six-month period.
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